CapEx refers to a Capital expenditure. CapEx is the spending of money on physical infrastructure up front and then deducting that expense from your tax bill over time. CapEx is an upfront cost, which has a value that reduces over time.
- Buildings (including subsequent costs that extend the useful life of a building),
- Computer equipment,
- Furniture and fixtures (including the cost of furniture that is aggregated and treated as a single unit, such as a group of desks),
- Intangible assets (such as a purchased taxi license or patent),
- Land (including the cost of upgrading the land, such as the cost of an irrigation system or a parking lot),
- Machinery (including the costs required to bring the equipment to its intended location and for its intended use),
- Office equipment,
- Software,
- Vehicles
OpEx refers to an Operational expenditure. OpEx is spending money on services or products now and being billed for them now. You can deduct this expense from your tax bill in the same year. There is no upfront cost, you pay for a service or product as you use it.
- Advertising costs,
- Insurance fees,
- Leasing commissions,
- Legal and attorney fees,
- License fees,
- Office overheads,
- Property management costs,
- Property taxation expenses,
- Raw materials and supplies,
- Salary and wages,
- Telephone and power overheads,
- Vehicle fuel and repair costs
